Tidewater: Red ink quarter, red ink year, but cash flow positive
Written by Nick Blenkey
Offshore services giant Tidewater Inc. (NYSE:TDW) today reportedrevenue for the three-months ended December 31, 2018, of $110.2 million and a net loss for the same period of $90.5 million (or $2.83 per common share), and revenue for the year ended December 31, 2018 of $406.5 million and a corresponding net loss of $171.5 million (or $6.45 per common share).
Excluding certain charges —many related costs associated with the company’s merger with GulfMark Offshore — net loss for the three-months ended December 31, 2018 was $13.2 million (or $0.42 per common share) and net loss for the year ended December 31, 2018 was $65.5 million (or $2.45 per common share).
John T. Rynd, Tidewater’s President and Chief Executive Officer, said that the company was “both cash flow positive from operating activities and cash flow positive from investing activities for the full year 2018.”
“Our team has made substantial progress implementing our merger integration plan,” said Rynd. “Our operational shore based footprint has been rapidly reduced, with the closing of five overlapping facilities that included the consolidation of all corporate operations into the existing Tidewater headquarters in Houston.”
Rynd said that on announcement of the Gulfmark deal “we committed to bringing the combined historical G&A run rate of $145 million down to $100 million on an annualized basis by the end of 2019. Based on the integration success we have achieved thus far and additional synergies we believe we can create by taking the best practices of both companies, we are committed to reducing that 2019 annualized exit run rate further, to $90 million, and we are continuing to look for additional savings. I am also very pleased that the optimization of the combined vessel fleet is progressing well, with several active and stacked vessels finding incremental employment at higher margins across the broader geographic footprint serviced by Tidewater – operating margin that could not have been captured by either company on its own.
“Our capital discipline focus, including fleet rationalization, working capital management, and disciplined investments in vessels, contributed significantly to our positive cash flow from operating and investing activities in 2018. We once again led our sector in selling stacked vessels out of the industry or to recycling yards in 2018. We will continue this commitment in 2019 and beyond to foster industry balance.”
